If you remember, third quarter of last year was down high teens, and the fourth quarter was down mid-single-digits. So I would say, those are the kind of 3 key pieces quarter-over-quarter.
Jack Meehan: Great. Okay. And then sticking on Diagnostics in China, getting a lot of questions about the volume-based procurement initiatives in the region. Prahlad or Max, just curious how you kind of frame any exposure there for your Diagnostics business and kind of thoughts on what that can mean for pricing over the coming years? Thanks.
Prahlad Singh: Yeah. And, Jack, we’ve talked about this earlier, right? I think our NPIs are differentiated enough. I mean, I think if you just to frame it, roughly high-single to probably 10% of our DX business will see some impact from value-based pricing. And over the years, we’ve continued to see mid-single-digit price rate declines in China on our portfolio. However, we’ve continued to compensate for that with newer NPIs and increased volume that we have seen, and we expect to continue to see that more than offset the price decline and result in double-digits immunodiagnostics growth for our portfolio there into the future. As we assume sort of flat growth for reproductive health and applied genomics in China DX are in mid-single-digits overall for the whole year though. I think the future potential impact from VBP price expanding, we will see it decline each year, given the mid-single-digit gradual price decline that we currently continue to see in China.
Operator: Thank you. Our next question comes from Matt Sykes of Goldman Sachs. Your line is now open. Please go ahead.
Matthew Sykes: Thanks for taking my questions. Good morning. Maybe just to start on the academic government end market. You showed pretty solid growth in the quarter. How are you thinking about that end market in the context of some of the budgets being set over time, whether it’s NIH or others in terms of the stability of that end market as we move into 2024?
Max Krakowiak: Yeah. Hey, Matt, how’s it going? So as we look at our academic and government customer base, as a reminder, that’s about 25% of our Life Sciences portfolio. And in the quarter, it did grow low-double-digits. The other point I would call out is that instruments makes up about 50% of that, while reagents makes up the other 50%. Our reagents business has continued to kind of grow at a mid-teens level year-to-date in the academic and government portfolio. We expect that to continue really maybe the, I would say, unique dynamic this year is really more around the instrument growth in academic and government. If you remember, they had much easier comps in 2022, they were coming off of. So instruments are posting, I would say, a healthier growth rate than what we would probably suspect long-term. But, again, you’re only talking about half of that portfolio is really instrumentation.
Matthew Sykes: Got it. Thanks, Max. And then just more of a high-level question. As you saw some of that demand from pharma/biotech drop off in September, could you maybe characterize the nature of that slowing in spend, just given the fact that a lot of these large pharma companies have big budget decisions to make and turning that around and respending sometimes takes a lot of time. I’m just wondering, do you see these sort of the slowdown in spending is sort of a transitory in terms of 2023 budgets? Or do you think there’s some bigger reprioritizations and spending and budget decisions moving forward into 2024?
Prahlad Singh: Yeah, Matt, I think from my perspective and just looking at the customer buying behavior, it’s not that. As we entered September, we saw more of a pausing or a cancellation rather than saying that this is going to be continuous. I think just given the IRA Act, customers are more than anything just ensuring that they calibrate and get their costs in line now. So I think it’s just more planning and ensuring that their cost structure is ready to address the IRA Act as it comes into play into 2025. So from our perspective, it is transitory and it will be there for a few quarters.
Matthew Sykes: Thanks, Prahlad. I appreciate it.
Operator: Thank you. Our next question comes from Josh Waldman of Cleveland Research. Your line is now open. Please go ahead.
Joshua Waldman: Good morning. Thanks for taking my questions. 2 for you. First, Max, can you help us think about the right earnings base for 2024? I mean, you have $80 million of cost reductions this year. I guess, how much of that is discretionary comp that will be coming back into the business? And then it sounds like you have higher interest expense, maybe tax rate and share count or tailwinds. Just curious if you think the $455 million guide for this year is the right way to think about the base entering next year? Or is it below that?
Max Krakowiak: Yeah. Hey, Josh. Look, I appreciate the question. I think as I mentioned before, in 2024, we are not giving guidance on EPS or anything of that nature or getting specific. We’re going to take the next couple of months to really refine our organic growth outlook of what we anticipate for next year. I think we were trying to get ahead in saying in one of the possible scenarios that it did look similar to this year, we wanted to kind of get out front in terms of some of the margin commentary and what that would look like. But, again, we’re going to take the next couple of months to really refine what we expect our organic growth to be for 2024.
Prahlad Singh: And, again, I’ll just add to this, Josh, because I know, obviously, people are curious on 2024. We really need to take the time to ensure that we understand what customer buying behavior looks like and how it evolves, the macro evolves over the next few months. But I think more importantly, as Max said, we are taking the right measures. We are taking action to protect our top quartile margin profile, despite revenue growth weakness and that includes the cost-cutting measures that we’ve already taken, and we will continue to take to protect and even expand our margins.
Joshua Waldman: Got it. Okay. And then, Prahlad, I wondered if you could provide more context on how the quarter progressed in the Life Science business. You obviously mentioned tighter reagents, but curious how instrument demand progressed. And then, I guess, how confident are you that you fully capture the potential downside? I mean, I think Max said, the Life Science business is expected to be down double-digits in the fourth quarter. It’s a wide range, I guess, any more context you can provide on kind of the right landing point for the Life Science business.
Prahlad Singh: Look, I mean, I think on the Life Sciences instruments side, we’ve assumed double-digit decline in the fourth quarter, and we’ve kept our reagents flat versus our third quarter. And essentially, the way I would say it is that we pattern that based on the buying behavior of our customer towards the end of the quarter, which was – as we said, and both Max and I pointed out, it was more of a steeper decline in the second half of the quarter.
Max Krakowiak: Yeah, the one other piece I would add, Josh, is that normally, we do see sort of a sequential dollar step-up in the fourth quarter from our Life Sciences instrumentation. Usually, that’s about a 20% volume step-up quarter-over-quarter, we have taken that now fully out of our guidance for the fourth quarter. I think the last time we spoke on our second quarter earnings call, we had reduced it, but we had not fully eliminated the step-up between the third and the fourth quarter, and now we have fully taken out any sequential step-up on instrumentation.
Joshua Waldman: Got it. That’s helpful. Thanks, guys.
Operator: Thank you. Our next question comes from Dan Brennan of TD Cowen. Your line is now open. Please go ahead.
Daniel Brennan: Great. Thanks for taking my questions, guys. Just maybe on the immunodiagnostics business since that’s been such a driver here. You guys sounded very positive on the continuation. Can you just give us a little color on kind of what you’re seeing there globally and the confidence that that kind of double-digit growth continues here in 2024?
